Role of traditional Chinese philosophies and new product development under circular economy in private manufacturing enterprise performance

The New product development (NPD) process-performance link has been sufficiently studied in academic research. However, the more recent NPD trend is significantly different from the conventional NPD with the inclusion of sustainability considerations, which is evidenced by the growing body of research on sustainable NPD and green NPD. In the context of Circular Economy (CE), it is no longer viable for companies to stick to conventional NPD process which targets only at profit. Instead, their NPD process must have some CE elements either due to self-interest or stakeholder requirements. In theory, NPD with CE considerations (hereafter CE-NPD), compared with conventional NPD, is associated with higher costs and longer development times due to the fulfilment of CE requirements along with product functions. This study empirically examines the effect of CE-NPD process on both Time-to-market (TTM) and profit performance in the context of Chinese private enterprises. In addition, the role of traditional Chinese philosophies of Confucianism and Taoism in influencing the CE-NPD process-performance link is also investigated. We find that firms’ CE-NPD projects reduce TTM and increase profit. Moreover, Confucianism positively moderates the relationship between CE-NPD process and TTM performance. However, it negatively moderates the CE-NPD - profit link. On the other hand, the moderating effect of Taoism is negative on both the CE-NPD - TTM and CE-NPD - profit links. An interesting finding of this study is that the coexistence of Confucian and Taoist values in NPD workers has the strongest positive impact on the relationship between CE-NPD process and performance. Our study provides insights on the way in which companies should plan to apply Chinese philosophies during the CE-NPD process to maximize the benefits.